Florida’s Housing Market Stays Strong Amid Rising Rates

Florida’s Housing Market Remains Strong Despite Rising Interest Rates

Estimated Reading Time: 4 minutes

  • Florida’s housing market shows resilience amidst rising mortgage rates.
  • Strong population growth and limited housing inventory are key factors.
  • Engaging a buyer broker can offer significant advantages in this competitive market.
  • The current median sales price for single-family homes is $415,000.

Table of Contents

Market Overview

Despite the economic headwinds of rising mortgage interest rates over the past year, Florida’s housing market continues to demonstrate remarkable resilience and strength. While higher borrowing costs have cooled demand somewhat compared to the frenzied pandemic peak, the Sunshine State’s real estate sector is still thriving thanks to robust population growth, limited housing inventory, and the enduring appeal of the Florida lifestyle.

According to the latest data from Florida Realtors, the statewide median sales price for single-family existing homes in April 2023 was $415,000, up 1.2% from the previous year. For condo-townhouse units, it was $322,000, an increase of 3.2% over April 2022. Although closed sales were down year-over-year due to affordability challenges, the market remains competitive, with a statewide median time to contract for single-family existing homes of just 24 days.

“Florida’s housing market is still seeing strong demand from buyers, even with higher interest rates,” says Beverly Howe, a Licensed Real Estate Broker and owner of Florida Buyer Broker. “The state’s population continues to grow as people are drawn to our incredible weather, outdoor recreation, lack of income tax, and high quality of life. This sustained population influx, coupled with a shortage of housing supply, is keeping prices stable and the market active.”

Population Growth

Indeed, Florida’s population growth shows no signs of slowing down. Between 2020 and 2021, the state gained an estimated 211,000 residents, the second-largest increase in the U.S. after Texas. Many of these new Floridians are coming from high-cost, high-tax states in the Northeast and Midwest, attracted by the ability to work remotely, Florida’s business-friendly environment, and the allure of year-round sunshine.

This steady stream of newcomers is helping to offset the impact of higher mortgage rates, which have risen from historic lows around 3% in 2021 to over 6% as of May 2023. While these increased borrowing costs have undoubtedly affected affordability and priced some buyers out of the market, demand remains strong, especially in popular destinations like Miami, Tampa, Orlando, and Jacksonville.

Inventory Challenges

Another factor supporting Florida’s housing market is the state’s constrained inventory of homes for sale. In April 2023, there was a 2.6-months’ supply of single-family homes and a 2.7-months’ supply of condo-townhouse properties, according to Florida Realtors. A balanced market typically has a 5.5-months’ supply, so these tight inventory levels are helping to keep prices elevated and the market competitive.

“Low inventory has been a persistent challenge in Florida’s housing market for several years now,” notes Howe. “With land and construction costs rising, and many existing homeowners reluctant to sell and give up their low mortgage rates, we simply don’t have enough homes to meet the demand from buyers. This supply-demand imbalance is likely to continue supporting prices even as interest rates remain elevated.”

Benefits of a Buyer Broker

For home buyers navigating this competitive landscape, working with an experienced buyer broker can provide a significant advantage. A buyer broker is a licensed real estate professional who exclusively represents the interests of the buyer, helping them find the right property, negotiate the best price and terms, and guide them through the complex purchasing process.

“In a market like Florida’s, where demand is high and inventory is low, having a skilled buyer broker on your side can make all the difference,” says Howe. “A buyer broker will have in-depth knowledge of the local market, access to off-market properties, and the negotiation expertise to help you secure your dream home at the best possible price. They can also save you time and stress by handling all the paperwork and coordination with lenders, inspectors, and title companies.”

Some key benefits of using a buyer broker include:

  • No cost to the buyer: In most cases, the buyer broker’s commission is paid by the seller, so there’s no additional cost to the buyer for this valuable service.
  • Objective advice and advocacy: A buyer broker works solely for you, providing unbiased guidance and looking out for your best interests at every step.
  • Access to more properties: Buyer brokers often know about off-market or coming-soon listings that you might miss on your own.
  • Skilled negotiation: An experienced buyer broker can help you craft a winning offer and negotiate favorable terms, potentially saving you money.
  • Streamlined process: Your buyer broker will handle all the details and paperwork, making the buying process as smooth and efficient as possible.

FAQ

Q: What should I consider when buying a home in Florida?
A: Key factors include the local market conditions, financing options, and working with experienced professionals like buyer brokers for support.

Q: How does population growth affect the housing market?
A: Increased demand from new residents can lead to higher prices and more competition in desirable areas.

Q: Why is having a buyer broker advantageous?
A: A buyer broker advocates for your best interests, provides market knowledge, and can help you find properties that suit your needs while saving you time and money.

Contact Beverly Howe

To learn more about how a buyer broker can help you navigate Florida’s competitive housing market and find your ideal home, contact Beverly Howe and her team at Florida Buyer Broker today. Call 1-800-283-7393 or visit floridabuyerbroker.com to schedule a free consultation and take the first step toward owning your piece of the Sunshine State.

Despite the challenges posed by rising interest rates, Florida’s housing market remains robust, fueled by strong population growth, limited inventory, and the state’s enduring appeal. By working with a skilled buyer broker like Beverly Howe and Florida Buyer Broker, you can position yourself for success in this dynamic market and turn your Florida homeownership dreams into reality.